*Tips for weathering the Economic Downturn

• Revisit your Business Plan 
• Who are your advisors? 
• Develop a strong strategy for raising capital 
• Think twice about cutting your marketing budget 
• Review your pricing structure 
• Offer Incentives
• Power to the people 
• Diversification 
• Scrutinize your financials 
• Manage your risk 
• Innovate 
• Make Lemonade 

see entire article

Ratio Analysis

Tools for Surviving a Downturn: Simple Financial Ratios to Check Your Business' Vital Signs   

By Greg Gould, Center Director and Certified Business Counselor at the Maine SBDC Service Center at Androscoggin Valley Council of Governments(AVCOG)  in Auburn  
 
Many entrepreneurs use financial ratios to measure the health of their business. Analysts and banks also use them to determine the feasibility of extending credit terms, approving new loans, etc. Keeping an eye on various ratios will allow you to pick up on trends quickly and make adjustments. Changing ratios can signal warning signs that might otherwise go unnoticed for an extended period, thus reducing your ability to get your business back on track. Once a business is in dire straights, there is often less that can be done to restore its health. As many experts will claim, "The numbers don't lie!" Numbers tell a story, but the story is only there if you can read it.   

Surviving in an Economic Downturn

" Whether or not a recession is on the horizon, any of these methods can strengthen your organization - and your bottom line. This is what makes a "solidly run" business. It means returning to the roots of your business and making certain that every one is healthy. All of these principles are worth revisiting at least annually, in good or bad times. " - Small Business Notes

Ten Tips for Turnaround Success by John Entwistle, Maine SBDC Business Counselor

1. Assess the current situation: review all aspects of the business.
2. Keep the wolves from the door: analyze accounts payable, communicate with creditors to work out a plan for repayment, and develop minimum cash flow needs.
3. Review personnel: set up an organizational chart, establish chain of command, review compensation and control and make necessary changes.
4. Internal control: develop and implement internal control procedures with regards to initiating and approving transactions and keeping records.
5. Improve cash position: develop and/or enforce existing accounts payable procedures.
6. Limit cash outflow: establish control over all purchasing activities.
7. Inventory management: set up necessary inventory control procedures; examine existing inventory and sell or liquidate excess.
8. Review pricing, advertising, and marketing: look for ways to minimizing expenses while maintaining market presence.
9. Check expense categories for ways to save money (get new quotes on insurance and communication systems, examine rent and utility expenses).
10. Monitor the new system: develop status reports; meet regularly with staff, monitor cash flow and set up system for checking all other vital statistics.
11. Above all: don't procrastinate, it can be fatal. Remember, as Will Rogers said, "Even if you're on the right track you'll get run over if you just sit there."